How to Determine Financial Stability of Insurance Company

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Inquisitive
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How to Determine Financial Stability of Insurance Company

Postby Inquisitive » Thu Mar 07, 2013 12:59 pm

Can some tell me how to determine the financial stability of an insurance company?

Before you make a fool of yourself, please don't suggest ratings companies like AM Best, Weiss, etc.

I'm looking for advice from someone who understands the industry & can tell me how to do research for an accurate & honest evaluation.

Bichon Frise
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Re: How to Determine Financial Stability of Insurance Compan

Postby Bichon Frise » Thu Mar 07, 2013 1:22 pm

one thing I look for is what kind of company it is. All my "big" insurance policies are taken out with mutual companies.

Perhaps the fool is the person asking random people on the internet for advice on something they take seriously?
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

Inquisitive
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Re: How to Determine Financial Stability of Insurance Compan

Postby Inquisitive » Thu Mar 07, 2013 1:50 pm

I was NOT "asking random people on the internet for advice".

I think if you re-read my post you may find that I asked for "someone who understands the industry" or in other words an industry expert.

Bichon Frise
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Re: How to Determine Financial Stability of Insurance Compan

Postby Bichon Frise » Thu Mar 07, 2013 7:45 pm

Inquisitive wrote:I was NOT "asking random people on the internet for advice".

I think if you re-read my post you may find that I asked for "someone who understands the industry" or in other words an industry expert.


I'm an industry expert, what do you want to know?
Bichon Frise

"If you only have 1 year to live, move to Penn...as it will seem like an eternity."

avocado wrote:Good to see you back, I was starting to miss your incisive commentary!

DaveInPgh
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Re: How to Determine Financial Stability of Insurance Compan

Postby DaveInPgh » Fri Mar 08, 2013 8:47 am

Before you make a fool of yourself, proofread your posts to make sure you don't come off like a jerkwad.

alohabear
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Re: How to Determine Financial Stability of Insurance Compan

Postby alohabear » Fri Mar 08, 2013 11:30 am

Inquisitive wrote:I was NOT "asking random people on the internet for advice".

I think if you re-read my post you may find that I asked for "someone who understands the industry" or in other words an industry expert.


I think you have a fundamental misunderstanding of how the internet works.

stannius
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Re: How to Determine Financial Stability of Insurance Compan

Postby stannius » Mon Mar 11, 2013 9:08 am

I am totally an expert and this is what I can tell you.

First, you have to take a soil sample. A company can not be on good footing unless it's on good footing, you know what I mean? Ideally you would get samples at every branch location, but that's not possible in the real world, so take the HQ, regional/district offices, and a random subset of branch/agent offices.

The next step is to calculate their coefficient of correlation with third-world dictatorial coups, which is known as "kappa". Make sure you only count coups where a military dictator takes over from a civilian government or vice versa.

Third, check the prices on eBay for the beanie babies that the company is using for its collateral. Compare current auctions with completed auctions to see how things are trending for the company.

When you combine these three signals, you will have a good idea of the stability of the insurance company.


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